Alibaba and Suning announced Monday their plan to enter into a “strategic alliance” by buying stakes in each other, with Alibaba investing £2.97bn and Suning up to £1.4bn.

The plan is to team up on online sales and logistics, thereby slashing delivery times. Alibaba has been moving towards offline retail, and teaming up with rival Suning, with its 1,600 outlets, is the latest move to bolster this.

Jack Ma, chairman of Alibaba, said the alliance would “fully integrate online and offline”:

This alliance will benefit consumers and merchants by cultivating an open and transparent integrated ecosystem that will be the backbone of the future economy.

Alibaba is paying 15.23 yuan a share for the 19.99 per cent stake in Suning, which makes it the second-largest shareholder in the retail giant.